Are Bonds for Municipal Projects Bad?

Last week, Republican lieutenant governor candidate Tate Reeves (the current state treasurer) refused to pull a campaign ad that his Republican political op-ponent described as misleading.

In his television ad, Reeves criticized state legislators for getting "into the habit of borrowing money for things that ought to be paid for in the annual budget." Reeves declared in his commercial that the state has "got to get out of that cycle," and that he plans to discourage borrowing money by being the "taxpayers' watchdog." It is a role Reeves said he has filled as state treasurer.

His opponent, Billy Hewes, a Republican state senator from Gulfport, countered Reeves' ad last week, complaining that the treasurer signed off on all the bond debt increases throughout his term.

"He is telling the voters that he has been a staunch voice for decreasing government debt. But the record shows a drastically different Tate Reeves," Hewes told reporters at a June 13 press conference at the state Capitol. "One would think our treasurer would be a little more accurate about his numbers."

Instead of pulling the ad, Reeves responded with an attack on Hewes' record as a senator who approved most bond projects proffered by the Legislature.

"After 20 years in the Legislature and hundreds of votes for more spending and billions more in debt, it's heartwarming to know that Senator Hewes has now finally realized with 50 days to go in this campaign that we need to reduce our debt burden," Reeves told the Northeast Mississippi Daily Journal.

Hewes admitted that he promoted most of the bond issues as senator. He said, however, he was not claiming to have worked against bonds while approving them. As a member of the three-member Mississippi Bond Commission, Reeves did exactly that.

The state Legislature approves new bond debt every legislative session for municipal projects such as infrastructure repair and economy-boosting developments such as new museums. The bond commission gets the final say on which money the state will lend at low interest rates. It does not approve every bond proposal that survives the Legislature.

Last September, Reeves refused to sign off on a $6 million low-interest state bond to fund critical water and sewer infrastructure repair for the city of Jackson, months after the city suffered a number of water pipe ruptures that effectively shut down the water supply to many state-owned buildings.

Reeves used his opposition to the bond as a political spring-board last year, saying he and Gov. Haley Barbour had managed to keep the state's bond debt low through their general reluctance to accept more bond debt.

"In the first four years the governor and I were in office, we had less debt on the books at the end of that four-year period than we had in the beginning, and we completely curbed the growth of our debt burden," Reeves told the Jackson Free Press in August. "We didn't do that by running around, chasing people and begging them to take money."

Rep. Credell Calhoun, D-Jackson, slammed the two for demonizing what he considered to be an important step in funding local projects.

"Too much debt is a problem, but you can't take too hostile an approach on the use of bonding," said Calhoun. "You'd think they didn't know that just about everything in state, county and local government is paid for with bonds."

Calhoun added that either candidate, if they consider bonding an enemy of the state budget, will set local municipalities up for deterioration and disaster.

"There's always a need to revitalize or renovate school buildings or colleges and infrastructure. All of those things would rot down without bonding to keep them together. If you have to wait until you get the funds to make those improvements, it wouldn't happen," Calhoun said. "It's like buying a house. Many of us would never get a house if we had to wait to save the money to afford a house. And things cost more to build later when factoring in inflation, so saving up for it may not be as cost-effective. That boy's confused, I think."